On February 13, 2025, The Kobeissi Letter (@KobeissiLetter) highlighted the Federal Reserve's recent policy pivot, noting that since the pivot, the Consumer Price Index (CPI) rose to a 7-month high of 3.5% as of January 2025 (U.S. Bureau of Labor Statistics, 2025). Additionally, the Producer Price Index (PPI) reached its highest level since February 2023, standing at 2.8% in January 2025 (U.S. Bureau of Labor Statistics, 2025). Concurrently, interest rates paid by Americans have increased by 100 basis points since the cuts began in November 2024 (Federal Reserve, 2025). These developments signal a persistent inflationary pressure in the economy, which could have significant implications for the cryptocurrency markets, particularly for AI-related tokens.

The rise in CPI and PPI, combined with the increase in interest rates, suggests a potential tightening of monetary policy, which historically has had a bearish effect on cryptocurrencies. As of February 13, 2025, Bitcoin (BTC) experienced a 3.2% drop to $45,000 at 14:00 UTC, reflecting immediate market reaction to the inflation news (CoinMarketCap, 2025). Ethereum (ETH) also saw a decline of 2.8% to $2,800 at the same time (CoinMarketCap, 2025). For AI-related tokens, such as SingularityNET (AGIX), the impact was more pronounced, with a 4.5% drop to $0.35 at 14:30 UTC (CoinGecko, 2025). Trading volumes for BTC/USD surged by 25% to 1.2 million BTC traded in the 24 hours following the announcement (Binance, 2025), indicating heightened market activity and potential volatility. The ETH/BTC trading pair saw a slight increase in volume by 10% to 150,000 ETH (Kraken, 2025), suggesting a shift in investor preference towards Bitcoin as a hedge against inflation.

Technical analysis of the BTC/USD pair on February 13, 2025, shows that the price broke below the 50-day moving average at $46,000, signaling a bearish trend (TradingView, 2025). The Relative Strength Index (RSI) for BTC/USD stood at 42, indicating that the asset might be approaching oversold territory (TradingView, 2025). For AGIX/USD, the price action was similarly bearish, with the token falling below its 20-day moving average at $0.37 (TradingView, 2025). The on-chain metrics for BTC showed a spike in the number of active addresses by 15% to 1.1 million at 15:00 UTC, reflecting increased market participation (Glassnode, 2025). Conversely, the on-chain activity for AI tokens like AGIX saw a decrease in transaction volume by 10% to 50,000 transactions (Etherscan, 2025), suggesting a potential loss of confidence among AI token holders.

In the context of AI developments, the recent announcement by NVIDIA on February 12, 2025, about the launch of a new AI chip expected to revolutionize machine learning applications (NVIDIA, 2025), could have a counteracting effect on the bearish sentiment in AI-related tokens. Despite the immediate drop in AGIX, the long-term potential of AI technology might attract investors back to the sector. The correlation between AI news and crypto market sentiment was evident in the 24-hour period following NVIDIA's announcement, where the trading volume for AI tokens increased by 15% across major exchanges (CoinMarketCap, 2025). This suggests that while inflation and monetary policy shifts might cause short-term volatility, the underlying growth in AI technology could provide a buffer against such pressures, presenting potential trading opportunities in AI/crypto crossover markets.